Refi every mortgage.
Offer 4%/40/4% down (plus the $15k bribe) on any new home purchase.
Bypass the banks and lend directly from the government (i.e. Fannie/Freddie).
Would that solve the housing crash and economic meltdown?
Would that save trillions vs. the road we're heading down?
And even though it stinks to high heaven, to avoid the Greater Depression, would you support it?
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54 comments:
I would support it only if the government is required to lend equally to single mothers with no job, unemployed illegal aliens and mandatory loans to convicted felons. White working taxpaying males will be placed at the bottom of the list permanently. Also no substatiation of income or assets is required and all loans made by the Govmnt to be non-recourse. Also the RE commission should be bumped up to 12% at least to compensate the Realtors and the NAR for their terrible lean years of late...
This way, no one is left behind and we can hurry up and go permanently Bankrupt as a Nation, begin mass bloody riots and starvation and sickness and get it over with.
Call Barney Frank for Details., Oh Yes, that reminds me, speaking of all the Barneys out there, all you wonderful Gay, Lesbian and Transgender beings, under the new program will receive priority funding, because after all, fair is fair in Adolph Hitlers America..
America is SO Fucked, you don't even know...
DIE U PIGS
Why not rent? That's all you'd be doing anyway; plus, you get to pay taxes and insurance. What a ruse!
Mortgages have been legalized loan sharking since their inception. I support any measure that would:
1) Require some borrower equity upfront.
2) Eliminate Realtor commission ($100 flat fee)
3)Appraisals must be in-house to prevent fraud.
4) This program is available to EVERY American family regardless of what the now owe be it $50K - 850K
No, because it wouldn't avoid anything. It would just postpone it unless we were willing to continue offering that particular subsidy forever.
No. But I would support no income tax in 2009 and no tax on interest. It's time to stop punishing savers as we all need to generate and save wealth to stabilize the country. The debt party is over.
-Mike
Now that would be a market dislocation. It would kill off the banks. Remind me, is that a bad thing?
"Why not rent? That's all you'd be doing anyway; plus, you get to pay taxes and insurance. What a ruse!"
And one nice thing about renting - you can move.
No, I would not support this.
So far, this country and it's leadership has shown itself to be very gutless indeed.
We talk about hardship and sacrifice yet every so-called solution offered is nothing more than a band-aid, a quick-fix to avoid the real consequences of this credit bubble gone wild.
We should be trying to expedite the adjustment back to a sustainable economy, rather than trying everything we can to avoid it.
If over-consumption and over-leveraging is the disease then the cure sure as hell isn't more of the same.
I'd support it, but it won't solve the housing crisis. Why? Here are my ten reasons:
1. The NAR already ate most of first-time homebuyers (would be homedebtors)
2. Existing homedebtors and home-strapped dwellers went up from 60% to 70+% in a short period of time. Those who joined the frenzy thinking a house is a teller machine--rather than a home to live in-- will continue to try to unload their burden on some other fools.
3. Fools nowadays are becoming a hard-to-find species--not because they have become smarter, but because, after the relentless blitzkrieg from the blogosphere, they somehow got the news that purchasing a house now is "bad for you."
4. To stabilize the market, housing prices must go back to 1997levels, no matter what the Gov does, and the 70+% ratio of homedebtors must go back to 60% of the entire population.
5. Accelerating unemployment rates will put hundreds of thousands of homedebtors and would-be buyers out of the market for years to come.
6. Millions of new retirees, especially baby boomers, having lost most of their savings in this crisis, will have no choice but to sell their secondary homes--perhaps even their primary residences-- to survive the severe times still ahead. This will add to the inventory of homes for sale, pushing home prices further down.
7. More banks, in the hundreds, are expected to fold in the coming few years, due to continued de-leveraging and toxic assets. Any banks left standing won't make credit available to individuals and businesses without stringent guarantees, thus reducing the pool of credit recipients to a minimum.
8. Rental will become so cheap that prospective homebuyers will simply drop any plans to buy a house in the foreseeable future.
9. House flippers, already squeezed to death by this downturn, will think twice before jumping back into the market. Many of those flippers are yet to unload what they have on their hands.
10. Fannie and Freddie will cease to exist in three to four years
11. ????
12. ????.....
HAVE AT IT FOLKS!
I dunno. Have we thought this all the way through? Have we followed the potential trail of the money as it works through the system to see who would really be benefiting from such a program? The govt lends the mortgages to whom? How does one qualify? Who oversees repayment? Is it strictly for owner-occupied properties? Who will monitor that? The home sellers will benefit by getting paid for their homes, but then they keep the money and get to qualify for govt loans on their new homes. Yes, it does indeed stink to high heaven. I see huge holes in this for massive fraud.
It's an expensive temporary fix for a long-term fiasco and I say NO.
no; the rule in real estate will remain "buy low" and "sell higher." given that jobs are going away, it doesn't make sense to buy a home as a "long term investment."
and a lower interest rate doesn't make a home easier to sell to a service sector that can't afford it.
so deflation has to come; it's going to be more painful than we imagine. but as steve balmer noted, things have to rest.
I would certainly not support it. Even at 4% interest, far too many people will ultimately wind up defaulting on their loans and the Government will have to absorb the loss with taxpayer money.
Moreover, as the government will be issuing the loans, there will be political pressure to further reduce lending standards to broaden home ownership, especially among demographics with traditionally lower home ownership rates. This lowering of standards will exacerbate the defaults and taxpayer liability.
It would only exacerbate the problem. Such a plan would pull forward some demand, but it would also guarantee that the government could not extricate itself from the mortgage market when things turn around. They will be locked into these loans if (when) their cost of funding rises above the rate they're offering to the public.
As it stands, real money investors are using the current government program of buying MBS to sell into an artificial bid. 4% 40yr mortgages would just accelerate that and leave the government holding trillions of underwater paper.
Keith,
The $15,000k home Bribe and the Car bribe both got removed fromt the stimulus bill last night. They wil NOT be part of the stimulus.
"Would that solve the housing crash and economic meltdown?"
------------------
Let me put this question a better way:
Will the economic meltdown, which was caused by too much credit, be solved by issuing even more credit?
Hmmm...that's a tough one. Let me think about it for a few days and then get back to you Keith.
-Mammoth
Ah boy,
indentured servitude..
Let it go...A lot of the supposed wealth just wasn't there.
Let the markets reset, let it go down..It will find it's way to bottom.
come across a string of 30 thousand dollar houses lately mixed into the lot of sameness and overpriced. wonder if affordability is a way to sit out the oncoming storms.
To the racist up top, you are ignorant about the true cause of the problem. White working males aren't the victim in this fiasco - they are the perpetrators. Everyone on this blog knows subprime is the scapegoat, it is not the bigger problem. The ALT-A and PRIME/JUMBO-PRIME are the true monster and that is mostly these "white working males" you speak of.
$800 billion divided by $200k is 4 million homes. What is the excess homes on the market? 19 million?
Looks like 4 Trillion is the right number. Unless the average price for a home drops to $50k.
The 4/40/4 plan only works if you have a job.
Don Payne
yep keith. very soon, many people will be debtors for life in the place where they live. it is always better to make people debtors first, then they are easier to control .
What I would support is a several Trillion dollar stimulas package,
Divided up amongst every 'Taxpayer'
Let us take care of this problem
.
You don't put Hefner in charge of the Daycare center!
.
.
...nor do you put the Fat kid in charge of the pie security at the county fair!
.
No. It is just prolonging the inevitable. We have to take the extreme pain the next 10 years. There is no other way out.
No.
1. It is an artificially low rate over a lengthy period and it constitutes debt slavery.
Simply put, we do not need debt slaves working menial jobs and/or working jobs just to pay the bills to them simply die off. Think of what could be accomplished if people were allowed to actually develop their inherent human talents and/or intellect, instead of slaving their entire lives away to pay off the bankers and/or merely survive. Given our productive capacities, it is absurd that we all work so much just to put food on the table or put a roof over our head. But alas, this is how "they" maintain control - by keeping us ignorant, down and indebted until we die. great lives we have made for ourselves! Or, should I say, they have made for us?
2. It only keeps prices artificially high - perpetuating the above into future generations. Heck, 15 year fixed used to be the norm, then it went to 30 year fixed, and now, it will be 40? Is this what we want for ourselves?
Debt slavery is not the answer - liberty and freedom to develop ourselves as true human beings is.
Lessee here! Gov gives 4%/40/4%, bypasses ALL the banks, who would get NO MORE bailout money, who are going to go down anyway when all those swaps come do. Gov gets any profit when home sells years down the road, plus the 15K has to be paid back. O.K., as long as any current homedebtor can re-fi at that rate as well.
I hate it, but it could work......maybe?
No, I guess not.
Keith,
Housing is NOT the problem as so many in washington want us to believe. The problem is more than 1 quadrillion in OTC derivatives. Jim Sinclair is right. The geeks have killed us, we just don't know it yet. This is it. It is now, and it is out of control. The politicians can do nothing at the trillion dollar level. All the moves being made now are off by 2-3 orders of magnitude relative to whats coming. The only hope is to build an alternative financial system before TSHTF. This means the means to barter in food, ammo and metal.
I'm in favor of the free market figuring it out. If you're a bank and you want to do that, feel free.
Apply it to all debt and at the same time put up the tariffs so we don't get looted again.
It is worth a try. We all need to understand that we are all in this together. The potential to not act will have dire consequences on everyone regardless of whether you own a house or not. So yes, I support it and I think it is one of the best ideas out there to solve the housing crises!
Just give every welfare family a home and be done with it.Why work hard anymore if you get stuff for free.
I would rather see a 4%/10 year loan. It's time to reward some of the prudent buyers rather than the ones that can't afford their homes.
Other changes I would love to see:
1. Tax free interest income for savings.
2. Pre tax, "401K, etc." earnings can be directed to paying a mortgage, paying off debt, into a CD, etc., rather than into a rat hole called the stock market.
3. Gold accepted for deposit at banks and converted into dollars on the spot.
4. The Fed mafia is dismantled; Bernanke, Greenspan and Geitner are imprisoned for life on domestic terrorism, fraud, embezzlement, extortion, counterfeiting, money laundering and racketeering charges and Ron Paul is put in charge of transitioning the US back to a free market economy.
I dream...
Sure, if I can pull out half a million first...
like the kind of day when one million bucks in the bank does not even earn enough interest to pay for an individuals health insurance>? . how much would a million buck house rent for? ..3000 a year? somebodys been monkeying with all assets
I like the ideal. I think it's better to do that then write down loan for some people. I think it might work and it sounds fair to everyone .imho
Keith, I can't believe that you missed this game on Tuesday at the Emirates Stadium in London:
www.youtube.com/watch?v=p9dnCH-tgGw
Buh-bye mortgage broker crooks, you did to yourselves greedy mofo:
Lenders drop mortgage brokers
Some big banks are cutting out mortgage brokers and having lending generated by their own people.
JP Morgan Chase announced in January that it would end its so-called wholesale operations. It will no longer fund loans arranged through brokers, instead it will make loans mostly through its own offices. And Citigroup said it will cut back the number of mortgage brokers it works with to 1,000 from 10,000.
Next to be on the extinction block: Realtor and sleazy car salesman.
WE DON'T NEED CROOKED MIDDLEMEN IN TRANSACTIONS. IT'S NOT EFFICIENT, IT'S STUPID. DIE BROKERS IN ANY ACTIVITY DIE!
.
PPT TO THE RESCUE, AS CLOCKWORK. THE MARKET IS MANIPULATED, STAY AWAY FROM THAT CROOKED CASINO! IT'S ALL RIGGED!
.
how about,no
we toss on the street the 14-20 million criminals that lied about their income.
after a few more years of nasty declines in real estate only those of us who are smart with our money should get a 5% 15 year loan
that would be the real solution.
FUCK NO!
Governtment needs a minimum mandatory 30-35% haircut effective IMMEDIATELY. They need to stay the fuck out of business and commerce.
Ideas and thoughts like this one are what has lead us to this eventual destination. No more trying to keep the ship from going down. Let the fucker sink and build a new, heartier ship. One with a solid hull and keel. One with a strong and just rudder.
Time to flush the turds down the toilet. Not hire more turds and give them more power.
Nope. Look up the amortization figures for a 40 year mortgage on your own mortgage and figure out the total of 480 payments...
You know unions in 1954 were vociferously against 30 year mortgages because they cared that people would be out so much money.
grandma pkk
"I like the ideal. I think it's better to do that then write down loan for some people. I think it might work and it sounds fair to everyone .imho
February 12, 2009 6:19 PM"
I agree - better than reducing principal - that's outrageous. OR... can my nephew reduce his student loan principal even though it doesn't look like he will be getting a job any time soon, my sister reduce her mortgage principal even though she is paying it and scrimping on everyting else, can we all reduce our credit card card payments since it's a little bit difficult right now with the banks all raising rates - and then what if we lose our job...?
This is a great time to quit your job and go on the dole. Can we still get in on it? Can we still buy a house we can't afford? God I hope so.
Just an aside - why hasn't Washington laid off or furloughed anybody?
Oh let me reword that - it's subsidies. Same difference. Us responsible ones get no breaks, but we do pay and pay and then we pay and then we pay...and then we pay.
How many updates does that make to the KeepPeopleInTheirHomes software? BTW, the latest updated cost of the FannieFreddie bailout = $236 billion.
NO F&%#&N WAY!
Nope.
Central planning has all sorts of unintended consequences. Just let the market work, damn it. If we have to have some pain, let's have it. The market will sort things out by returning the decision making to the lender and the borrower, not some idiot in Washington.
Those lenders who gambled and lost will be encouraged to find another type of work. Meanwhile, honest lenders who can accurately assess risk will thrive and help people get the loans they deserve.
People who saved will eventually be rewarded with higher interest rates. People who borrowed in the past will be motivated to be savers.
We have the flu. We need to throw up and get the disease out.
Instead of all of these convoluted plans, let's just write people checks.
We have how put how much up in simulus packages, bailouts, etc?
Let's call it a cozy $3 trillion. There are 300 million people in the US. So, that's $10,000 per person. How 'bout we give out roughly $10,000 for each adult 21 and over. Ever year younger than that, you lose $1K down to a minimum of $5K at age 16.
A family of four gets ~$30K.
A single guy gets $10K.
If that doesn't bail you out of your financial problems, you're probably not fixable.
No!
Kirsten is such a hottie.
Yes. Initial estimates were not so bad, but Paulson thought they were off by a factor of two or three. This could be done so it would keep people in their homes while letting the market correct. Just paper losses. Win-win.
"Central planning has all sorts of unintended consequences. Just let the market work, damn it. "
That worked great so far. Got any more bright ideas?
No!
I'd be in favor of 4%, 40 year loans, or even 30 year loans provided that:
1. There is a 20% downpayment
2. Income is verified
3. Payments don't exceed 30% of net income
THINK ABOUT IT. THIS WAY YOU REWARD PEOPLE WHO HAVE MONEY AND SAVE INSTEAD OF THOSE WHO GAMBLED AND LOST DURING THE HOUSING BUBBLE.
Of course the housing gamblers win indirectly because the stimulus of home purchasing from those who ACTUALLY HAVE MONEY would end up stablizing home prices much sooner than if you did nothing.
The Ant and the Grasshopper, 2008 edition
by Michelle Malkin
Creators Syndicate
Copyright 2008
With what looks like imminent passage of the Mother of All Bailouts (following on the heels of a year’s worth of government-funded rescues of private homeowners, lenders, insurers, and the automakers), Washington has turned Aesop’s famous fable about prudence and hard work on its head. The time is ripe for a revised 2008 edition of “The Ant and the Grasshopper:”
In a meadow on a hot summer’s day, a Grasshopper was chirping and carousing his time away. He watched scornfully as an Ant nearby struggled to store up large kernels of food and build a secure nest. The Ant pulled overtime shifts to pay off his loans and accumulate retirement funds for the future.
“Give it a rest,” the Grasshopper said. “Why bother saving and slaving and toiling and moiling? Let’s party!” The Ant demurred: “I am planning ahead for winter and you should do the same.” The Grasshopper blew off the Ant, squandered his supplies the rest of the season, and abandoned his home while on vacation (paid for by tapping every last cent of his home equity gain) instead of holding down a job.
When winter came, the Grasshopper’s pantry was empty and his shelter ruined from neglect. The Ant, weary from planting, harvesting, and stocking up for months, was dining comfortably in his nest.
Cold, hungry, jobless, facing foreclosure, and up to his two pairs of eyeballs in debt, the Grasshopper limped to the Association of Community Winged Insects for Rescue Now and demanded recourse. The office was swamped with thousands just like him. ACWIRN immediately put the Grasshopper to work registering dead ants as new voters.
Funded with tax dollars from the rest of the meadow’s residents, ACWIRN organized mass protests at the Bank of Antamerica, ambushed its top officials at their private homes, harassed their children, and demanded that the meadow’s politicians halt all foreclosures (”We must keep Grasshoppers in their houses!”) and outlaw discriminatory lending practices against starving, homeless Grasshoppers (”Well-stocked shelters are basic insect rights!”)
The banking industry capitulated; the Orthoptera Lobby secured hundreds of millions of dollars in housing earmarks and grants and counseling subsidies to support the Grasshoppers with the shadiest credit and employment histories. Antie Mae, the meadow’s government-backed home lending giant, fueled the push for increased insect homeownership in the name of biodiversity. Its executives cooked the books and headed for the hills. Katie Cricket and the Mainstream Meadow Media joined the grievance-for-profit circus, profiling Grasshopper sob stories and drumming up ratings as bewildered Ants wondered who was looking out for them.
The banks drowned in toxic debt. More Grasshoppers fell behind on their mortgage payments. Bailout mania and panic gripped the meadow.
Our little Ant, minding his own business, heard a knock on his door one late winter night a year later. It was his old, sneering Grasshopper neighbor. With ACWIRN’s presidential candidate, Barack Cicada, now in office, the Grasshopper had been hired by the meadow as a tax collector.
“I’m here to take your provisions,” the Grasshopper cackled.
But it was the Ant who had the last laugh. “I’ve learned my lesson,” he told his shiftless friend. “Why bother saving and slaving and toiling and moiling? I’ve spent all my savings. I’m walking away from my mortgage. Thrift is for suckers,” the Ant said as he headed out the door, leaving the Grasshopper empty-handed.
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